4 Reasons Mexico’s Medical Device Industry is Attracting Interest, Investment

By Sandra Malottky | Chihuahua Business Development Manager at American Industries Group®
Published 01/25/2023

The global medical devices industry is projected to reach up to USD 612.7 billion by 2025, which will be a solid 30% increase between 2020 and 2025. With longer life expectancies, aging populations, and increased access to and developments in medical treatments, this rapid expansion means big opportunities for companies and increased competition to gain market share. More and more medical device manufacturing companies are expanding or relocating to Mexico to capitalize on the multiple benefits it offers. Some of the main ones include:

Mexico’s Proximity to the United States

Mexico is the leading exporter of medical equipment and devices to the United States and the 8th largest global manufacturer of medical devices and is home to over 2,500 companies specializing in medical device manufacturing. States with the most significant production include Chihuahua, Tamaulipas, and Baja California. Tijuana is home to the largest number of medical device manufacturing companies in North America. The city’s proximity to San Diego’s National Biotech Cluster, one of the top R&D megaregions in US for medical investigation, and Tijuana’s productivity hub at the very border with the US have made Tijuana into a top-notch manufacturer of medical equipment.

World-class quality

Medical device manufacturing in Mexico is globally recognized for its high quality by the world’s most prestigious medical device companies, including Medtronic, Johnson & Johnson, Cardinal Healthcare, Stryker, Medtronic, Becton Dickinson, Philips, GE Medical Systems, and Siemens, to name a few. These and other manufacturers produce FDA Class I, II, and III products, which are subject to the same safety regulations as products manufactured in the US, and meet USFDA standards, with facilities that are FDA, CE, and ISO 13485 certified. Furthermore, the updated USMCA trade agreement, which entered into effect in July of 2020, has promoted further growth and investment in the industry by providing greater certainty for investors. It added several provisions to foster growth in the medical devices industry by streamlining processes for importing medical and pharmaceutical production and harmonizing and enhancing regulatory compatibility.

medical industry in mexico

Average 20% savings on manufacturing costs compared to China

With the ongoing trend in manufacturing aimed at making supply chains more agile, diverse, and less dependent on China, companies are reshoring manufacturing operations to take advantage of Mexico’s competitive labor rates. In addition to the savings, Mexico’s workforce is also highly skilled. Its triple helix model, with cooperation between industry, academia and government, means Mexico has thousands of students graduating each year in technical, undergraduate, and graduate programs related to Medical device manufacturing.

Well-developed supply chain

Over recent decades, this significant growth in the sector has resulted in a well-developed and mature supply chain in the medical devices manufacturing industry in Mexico, meaning companies have access to industry hubs, highly integrated supply chains, and cutting-edge industrial facilities.

Mexico’s geographical advantage, ability to offer better quality guarantees than its competitors, and the fact that standards are already very closely aligned to those in the US makes it poised to continue to move up the global value chain in the medical devices sector. Though this expansion will likely be more gradual than in other industries, such as the automotive industry Mexico and the aerospace industry in Mexico, due to the complex equipment required to manufacture these high-tech devices, everything is in place to allow it to become a world leader in the industry. To ensure this, it will also be essential for the country to work on closing the skills gap by forming alliances between manufacturers, governments, and higher education institutions.

aerospace industry in mexico

Sandra Malottky

Chihuahua Business Development Manager

American Industries Group®

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